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New Energy Consumption Promotion: Price Mechanism Notice

by Priya Shah – Business Editor

Okay, let’s break down the key takeaways from this document regarding electricity billing for “nearby consumption ⁤projects” (likely referring to on-site generation and consumption, like​ solar or wind⁤ power directly used⁣ at a facility). Here’s a summary, categorized for clarity:

1.⁣ Capacity (Demand) Electricity Bill – The core Change

* ⁤ New Calculation: The primary shift is how ⁢ capacity charges are calculated.Instead‌ of the⁣ conventional two-part transmission and‌ distribution price model, there’s a new formula:
* Capacity Bill =​ Policy-based Capacity Charge + ⁤(Voltage ‌Level ‍Price * Average Load ‍Rate * 730 hours ⁣* Grid Connection‍ Capacity)

* Key Components of the New Formula:

* policy-Based Capacity Charge: This is determined by current regulations.
⁢ * ⁤ Voltage Level Price: ⁣The⁤ standard electricity price for the voltage level of ⁣the connection.
⁢ ‌ *‍ Average Load Rate: this is ⁣a crucial factor, currently set at the ‌average for industrial/commercial users with 110kV+​ connections. It’s calculated‌ by the grid operator and ⁣approved by provincial authorities. This is‍ a key variable ‌impacting the cost.
* 730 Hours: A fixed ​number of hours used in the⁢ calculation (likely representing peak demand hours).
* ⁣ Grid Connection Capacity: The‍ total capacity connected to the public⁣ grid, including:
⁣ * ‍Power receiving transformers
* High-voltage motors not connected‍ through transformers.
* ⁣ Option⁤ to Stay with Old Model: Projects needing high reliability and backup capacity can opt to continue with the traditional two-part transmission and distribution pricing.

2. System Operation Fee

* initial Approach: Initially,⁢ the system operation fee will‌ be based on the⁢ grid power used.
* ‍ Transition: The plan is to move to a ​fee based on capacity occupied (how much⁢ capacity the project reserves on the grid).
* Self-Consumption Incentives: There’s a temporary⁤ exemption of cross-subsidies​ for self-consumed‍ electricity (electricity generated and used on-site). New cross-subsidies for ‌self-consumption will be introduced.

3. ⁢Power Market Participation

* equal footing: The‍ project is treated as equal ​to other power generators and users.
* ⁤ Market-Based​ Pricing:

‌ ⁢*​ Spot Market areas: Trading and settlement will follow market rules.
* ‍ Non-Spot Market Areas: Reverse power transmission (selling excess power back to the grid)​ is generally ⁢ not allowed.
* new Energy ⁢Price Exclusion: The project’s grid power supply is not included in price settlement mechanisms designed for the ‍sustainable development of new energy.
* Direct market participation: The project must directly participate in market transactions when consuming⁢ electricity. The grid company cannot act as an intermediary.
* Wire Loss Costs: The project bears the cost of wire losses (energy lost during transmission) ⁣when using the grid.

4. Implementation & Oversight

* ‌ Provincial responsibility: ‌Provincial price​ authorities are responsible for tracking,​ monitoring, and providing feedback on the implementation.
* Policy Guidance: They must also interpret the⁢ policy and guide project owners.
* Grid Connection Process:

​ *⁣ Project owners file with local authorities.
* They apply to​ the ​grid company for connection.
* They⁣ independently determine grid capacity.
* They ‌sign contracts (power supply, purchase, grid connection) with the grid company.
* ⁤ Grid Company audits: Grid companies must audit connections and provide settlement services based on filed documents.
* ⁤ Reporting: ⁤Grid companies must report monthly data on fees to ⁣provincial authorities.

5.Effective date

* October⁣ 1, 2025: This ​is when the ‌new rules take effect.
* Existing Projects: Local price​ authorities will handle the transition ⁢for projects already connected ​before this date.

In essence,this document outlines a move towards⁢ a more market-oriented and ‍transparent electricity billing system for nearby consumption projects,with a greater emphasis on capacity charges and direct market participation. ‌ The average load rate and grid connection capacity will⁣ be key factors in determining‌ costs.

Do you have any specific questions about any of these points, or would you like me to elaborate on a particular⁤ aspect?​ For example, are you interested ‍in how the average ⁤load‌ rate is calculated, or‌ the implications of not being able to sell excess power back to ⁤the grid in non-spot market areas?

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